FINRA Series 31 - Quiz 4 - Pauline.new
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Question 1 of 10
1. Question
Which of the following basic terms in the Options Market shows the number of outstanding contracts in a particular options contract?
Correct
Under the options market, there are basic and unfamiliar terms that an individual must know. An options market is risky and when it comes to trading there is approval from a broker of an investor. There are a lot of basic and unfamiliar terms to be remembered, but under the basic terms in an options market, one of which is the Open Interest – this shows the number of outstanding contracts in an options market or contract. The information can be divided by calls, strike price, and the date of expiration for options related to a specific security.
Incorrect
Under the options market, there are basic and unfamiliar terms that an individual must know. An options market is risky and when it comes to trading there is approval from a broker of an investor. There are a lot of basic and unfamiliar terms to be remembered, but under the basic terms in an options market, one of which is the Open Interest – this shows the number of outstanding contracts in an options market or contract. The information can be divided by calls, strike price, and the date of expiration for options related to a specific security.
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Question 2 of 10
2. Question
Under the Marking to the Market, which of the following information shows that such deposits shall be made either with the member demanding the same or failure on a depositary?
Correct
In the rule regarding the Marking to the Market, the Demand for Deposit is one of the information that an individual must know. This shows the party who is somehow unsecured by reason of such change in the market value of a contract’s subject in securities regarding the demand from another party about the deposit that is equal to the difference between the contract and market price without the need to make such mutual deposit.
Incorrect
In the rule regarding the Marking to the Market, the Demand for Deposit is one of the information that an individual must know. This shows the party who is somehow unsecured by reason of such change in the market value of a contract’s subject in securities regarding the demand from another party about the deposit that is equal to the difference between the contract and market price without the need to make such mutual deposit.
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Question 3 of 10
3. Question
Which of the following information in the Marking to the Market talks about the demand for deposits or refunds shall be in writing and shall be transported at the office of the party?
Correct
Under the Marking to the Market, there is information that an individual must know. The delivery of demand for deposit or refund is where all demands for deposits or refunds shall be written and must be delivered at the office of a party where the demand is completed during the member banks’ business hours of the Federal Reserve System. It was also mentioned that such demands shall be observed immediately.
Incorrect
Under the Marking to the Market, there is information that an individual must know. The delivery of demand for deposit or refund is where all demands for deposits or refunds shall be written and must be delivered at the office of a party where the demand is completed during the member banks’ business hours of the Federal Reserve System. It was also mentioned that such demands shall be observed immediately.
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Question 4 of 10
4. Question
In a settlement, who of the following will continue to administer the arbitration and receives written notice of the settlement?
Correct
In a settlement, both parties may settle their dispute at any time. Such parties must file a notice with a director. The director will continue to administer the arbitration, and fees may accrue continuously until the Director receives such written notice regarding the settlement. There is no need for parties to disclose the terms of a settlement agreement to the Director or the Office of Dispute Resolution, but the associated person and member may have obligations when reporting under the FINRA rules.
Incorrect
In a settlement, both parties may settle their dispute at any time. Such parties must file a notice with a director. The director will continue to administer the arbitration, and fees may accrue continuously until the Director receives such written notice regarding the settlement. There is no need for parties to disclose the terms of a settlement agreement to the Director or the Office of Dispute Resolution, but the associated person and member may have obligations when reporting under the FINRA rules.
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Question 5 of 10
5. Question
In a settlement, how will the fees be divided to the settling parties if parties fail to agree on the allocation of any outstanding fees?
Correct
Under this code in FINRA about such settlement, the settling parties are responsible for fees incurred. In this settlement, both parties can settle this at any time. If the settling parties failed to agree on the allocation of outstanding fees, such fees must be divided equally to them. The exception is that the member party will remain responsible for surcharges, prehearing, and hearing process fees.
Incorrect
Under this code in FINRA about such settlement, the settling parties are responsible for fees incurred. In this settlement, both parties can settle this at any time. If the settling parties failed to agree on the allocation of outstanding fees, such fees must be divided equally to them. The exception is that the member party will remain responsible for surcharges, prehearing, and hearing process fees.
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Question 6 of 10
6. Question
Under the Clearance and Settlement, who of the following shall clear and settle transaction designated securities through facilities that use a continuous net settlement system?
Correct
Under this rule regarding the Clearance and Settlement, an individual that is assigned in clearing and settlement of such transactions in designated securities in a registered clearing agency facility that has continuous use of net settlement system is a Trade Reporting Facility Participant. It requires direct participation such as the use of direct clearing services or an entry into a compatible clearing arrangement that another member clears trades.
Incorrect
Under this rule regarding the Clearance and Settlement, an individual that is assigned in clearing and settlement of such transactions in designated securities in a registered clearing agency facility that has continuous use of net settlement system is a Trade Reporting Facility Participant. It requires direct participation such as the use of direct clearing services or an entry into a compatible clearing arrangement that another member clears trades.
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Question 7 of 10
7. Question
In the rejection of an offer of settlement, either uncontested or contested, how should be a respondent be notified?
Correct
Regarding the rejection of the offer of settlement under the settlement procedure, either uncontested or contested offer of settlement, is rejected by the Hearing Panel, or if applicable, by the Extended Hearing Panel, the Review Subcommittee, or the National Adjudicatory Council, the respondent shall be notified in writing and the offer of settlement and order of acceptance shall be considered withdrawn. The offer and proposed order of acceptance that is rejected shall not establish a part of the record in any proceeding against the offer that was made by a Respondent.
Incorrect
Regarding the rejection of the offer of settlement under the settlement procedure, either uncontested or contested offer of settlement, is rejected by the Hearing Panel, or if applicable, by the Extended Hearing Panel, the Review Subcommittee, or the National Adjudicatory Council, the respondent shall be notified in writing and the offer of settlement and order of acceptance shall be considered withdrawn. The offer and proposed order of acceptance that is rejected shall not establish a part of the record in any proceeding against the offer that was made by a Respondent.
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Question 8 of 10
8. Question
Under the Settlement Procedure, which of the following shows the information regarding the settlement offers that may be accepted or rejected as to any one or all respondents submitting offers?
Correct
In the Settlement Procedure, disciplinary proceedings with multiple respondents are information that the individual must know. This shows that the settlement offers may be either accepted or rejected as to all the respondents submitting offers. Next, the proceedings afterward shall be terminated where those respondents’ offer of settlement is accepted, but those respondents may be required to participate in any hearing conducted whose offers were rejected and did not submit offers of settlement.
Incorrect
In the Settlement Procedure, disciplinary proceedings with multiple respondents are information that the individual must know. This shows that the settlement offers may be either accepted or rejected as to all the respondents submitting offers. Next, the proceedings afterward shall be terminated where those respondents’ offer of settlement is accepted, but those respondents may be required to participate in any hearing conducted whose offers were rejected and did not submit offers of settlement.
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Question 9 of 10
9. Question
Which of the following allows investors to realize limited rewards in exchange for limited risk?
Correct
Under the Margin Requirements, in exchange for limited risks, the Options Spread Strategies allows investors to realize limited rewards. It also consists of a combination of long and short call options contracts. Such options spread can be paired in ways that it offsets each other in terms of risks. In spread positions, if it is viewed as stand-alone strategies, the total risk of the combined spreads is less than the sum of the risk.
Incorrect
Under the Margin Requirements, in exchange for limited risks, the Options Spread Strategies allows investors to realize limited rewards. It also consists of a combination of long and short call options contracts. Such options spread can be paired in ways that it offsets each other in terms of risks. In spread positions, if it is viewed as stand-alone strategies, the total risk of the combined spreads is less than the sum of the risk.
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Question 10 of 10
10. Question
Which of the following is generally the price an individual pays to purchase securities, capital gain distributions, and other costs?
Correct
The Cost Basis shows the price an individual paid to buy such securities for stocks or bonds. These purchases include capital gains distributions or it may also be called reinvestment of dividends. It also includes other costs such as commission or other fees that an individual paid to complete any transactions. The said information is included in a confirmation statement that a broker sends to an individual after he or she purchased securities.
Incorrect
The Cost Basis shows the price an individual paid to buy such securities for stocks or bonds. These purchases include capital gains distributions or it may also be called reinvestment of dividends. It also includes other costs such as commission or other fees that an individual paid to complete any transactions. The said information is included in a confirmation statement that a broker sends to an individual after he or she purchased securities.